Gulf Capital launches $250-300 million credit fund for Mena

The Abu Dhabi-based Gulf Capital unveiled a new regional credit business that will focus primarily on providing liquidity and growth capital for regional companies and acquisition finance for private equity firms in the Middle East and Turkey.

The new credit business will fill an acute gap in the market for Mena financing by offering credit solutions to corporate and private equity investors. The $250-300 million credit fund, Gulf Credit Partners, will be launched by the end of the year following the regulators’ approval. Unlike traditional asset-based lenders, the financing provided could be based on the cash flows generated by the borrower. As such, the financings will be flexible using various structures to meet borrowers’ needs including longer maturities and more deferred repayment dates than those typically seen in traditional lending.

Dr Karim El Solh, CEO of Gulf Capital, said: “This new initiative mirrors the evolution of global buy-out firms into diversified alternative asset management platforms, notably in the United States and Europe. This expansion strategy is part of Gulf Capital’s long-term goal of increasing its overall assets under management and boosting and diversifying its overall profitability.”

Christopher Baines, Managing Director and co-Head of Gulf Credit Partners said: “The shortage in regional liquidity is forcing borrowers to seek new alternative solutions to finance their growth plans. More sophisticated, cash-flow based lending is needed to meet those demands for capital, especially when companies are expanding or making acquisitions. We believe that an investment in the credit fund will give our investors attractive superior risk-adjusted returns with a large current income component, which will help diversify and enhance their investment portfolios.”